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The Distributional Impact of In Kind Public Benefits in European Countries

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  • Paulus, Alari

    () (ISER, University of Essex)

  • Sutherland, Holly

    () (ISER, University of Essex)

  • Tsakloglou, Panos

    () (Athens University of Economics and Business)

Abstract

International comparisons of inequality based on measures of disposable income may not be valid if the size and incidence of publicly-provided in kind benefits differ across the countries considered. The benefits that are financed by taxation in one country may need to be purchased out of disposable income in another. We estimate the size and incidence of in kind or "non cash" benefits from public housing subsidies, education and health care for five European countries using comparable methods and data. Inequality in the augmented income measure is dramatically lower than in disposable income, with the effects of the three components varying in importance across countries. Adapting equivalence scales to take proper account of differences in needs for health care and education across population members reduces the scale of the effect, but does not eliminate it.

Suggested Citation

  • Paulus, Alari & Sutherland, Holly & Tsakloglou, Panos, 2009. "The Distributional Impact of In Kind Public Benefits in European Countries," IZA Discussion Papers 4581, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp4581
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    More about this item

    Keywords

    inequality; in kind transfers; cross-national comparisons;
    All these keywords.

    JEL classification:

    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs

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